Correlation Between Delta Air and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both Delta Air and CHEMICAL INDUSTRIES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Delta Air and CHEMICAL INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on Delta Air and CHEMICAL INDUSTRIES and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Delta Air with a short position of CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and CHEMICAL INDUSTRIES.
Diversification Opportunities for Delta Air and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Delta and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES and Delta Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Delta Air Lines are associated (or correlated) with CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of Delta Air i.e., Delta Air and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between Delta Air and CHEMICAL INDUSTRIES
Assuming the 90 days horizon Delta Air Lines is expected to generate 8.68 times more return on investment than CHEMICAL INDUSTRIES. However, Delta Air is 8.68 times more volatile than CHEMICAL INDUSTRIES. It trades about 0.06 of its potential returns per unit of risk. CHEMICAL INDUSTRIES is currently generating about 0.06 per unit of risk. If you would invest 3,663 in Delta Air Lines on October 30, 2024 and sell it today you would earn a total of 2,740 from holding Delta Air Lines or generate 74.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| Delta Air Lines |
| CHEMICAL INDUSTRIES |
Delta Air and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and CHEMICAL INDUSTRIES
The main advantage of trading using opposite Delta Air and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, CHEMICAL INDUSTRIES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES's long position.| Delta Air vs. Air China Limited | Delta Air vs. AIR CHINA LTD | Delta Air vs. RYANAIR HLDGS ADR | Delta Air vs. Southwest Airlines Co |
| CHEMICAL INDUSTRIES vs. Xiwang Special Steel | CHEMICAL INDUSTRIES vs. CHAMPION IRON | CHEMICAL INDUSTRIES vs. Mount Gibson Iron | CHEMICAL INDUSTRIES vs. TOMBADOR IRON LTD |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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